Making the business case for integrated HR systems

Strategic, security and efficiency benefits should all be part of your business case for integrating HR, L&D and business applications, says experts

If you’ve decided the benefits of integrating HR applications make sense for your team and your organisation, how do you go about securing the buy in (and, crucially, the funding), for such a significant systems project?

It’s all about getting a real handle on the risks, benefits and costs, says Jordan Mori, managing partner at Hensen Associates, a consultancy that supports HR teams with technological change. “You have to really nail the commercials, the project scope, the investment, the amount of resources you need – internal and external – and understand how the project might affect business as usual.

He adds: “You should be able to state the benefit of integrating any system as: ‘this will allow HR to do X, which will help the business to do Y’. Unless you get to ‘this will help the business to do Y’, the only thing you may achieve is a cost saving. That’s not always a negative thing, but it doesn’t necessarily add value.”

David Wilson, CEO at Fosway Group, an HR and L&D analyst firm, likens a good business case to a three-layer cake. The base layer comprises benefits derived from spending less time maintaining data or updating it between systems. “That’s very tactical, but it could easily add up to stuff that makes it worth doing,” he says.

The middle layer concerns HR operations and the efficiencies integrated systems could bring. One way to quantify this, says Megan Hope, partner manager at CIPHR, is to note down for a couple of weeks how much time you and your team spend on administrative tasks that could be eliminated by linking systems together, such as setting up new users. “It might just be five minutes each time, but you do the same process 50 times a month, so it adds up really quickly,” she says.

You might also want to assess the risks associated with non-compliance and cybersecurity, Hope adds. “Having integrated systems makes it easier to run reports to find out if everyone is up to date with mandatory training, or to deactivate systems access when people leave your organisation.”

Much of the business case for integrating HR systems will be driven by these first two layers, says Wilson, but the top layer – the strategic benefits – are the real reasons to give a project the green light. “There’s a whole bunch of things you can’t really do at a business level without having that picture [of integrated data]. Typically, we would say to people: build a business case that is driven by the strategic benefit, but that is paid for by the other two. So, although your ability to retain key talent might be one of the big reasons for systems change, you don’t have to put a financial value on that because the investment is being paid for by tactical and operational efficiencies.”

Kathryn Kendall, chief people officer at Benefex, agrees that it’s vital to map your ambitions for any HR systems project against your organisation’s strategic goals. “The danger in any project like this is looking at it in isolation. You have to lay it over the HR and business strategy,” she says. “There will always be budgetary constraints, and cost-benefit analysis, but you should look at the opportunities it will bring. Sure, it might make us more efficient in X way – but what will it enable us to do as a result?”

This is an extract from CIPHR’s free white paper, Better together: the future for HR systems integration. Download it here